Service tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 June 2013
Do a manufacturing company need to pay service tax for calibration(labour charges only)?
CMA Ramesh Krishnan
(Expert)
09 September 2013
Is there any service provided separately and any bills are raised separately?
24 July 2025
✅ Query:
Does a manufacturing company need to pay service tax for calibration services (labour charges only)?
✅ Answer: YES — Calibration Services are taxable under Service Tax, provided certain conditions are met.
🔍 Let’s break this down:
🔹 1. Nature of Calibration Service:
Calibration refers to testing/measuring instruments to ensure they meet standards.
This falls under Technical Testing and Analysis Services, as per Section 65(105)(zzh) of the Finance Act, 1994 (prior to GST).
🔹 2. Taxability:
If the calibration is not in relation to exempted goods or not part of manufacturing, service tax is applicable.
Labour charges, if billed separately for calibration, are still considered taxable because service tax is on the activity, not on cost structure.
🔹 3. Exemption Scenarios (Not Applicable):
If calibration is done in-house — no service tax.
If services are covered under a job work related to manufacture of excisable goods and fall under mega exemption Notification 25/2012-ST, there may be exemption, but calibration usually does not qualify unless it's integrally part of manufacturing.
🔹 4. Reverse Charge Not Applicable:
Calibration services are not under reverse charge, so the service provider charges service tax, not the manufacturing company.
✅ What to Check:
✔ Whether you received a separate invoice for calibration service?
✔ Is the service provider registered under Service Tax?
✔ Is the service part of a manufacturing process or an independent activity?
If it's a separate calibration job (like ISO-certified labs), yes, service tax is applicable, and the provider must charge and pay it.
🧾 Reference:
Section 65(105)(zzh), Finance Act, 1994
CBEC Education Guide (2012)
Notification No. 25/2012-ST (Mega Exemption)
Does a manufacturing company need to pay service tax for calibration services (labour charges only)?
✅ Answer: YES — Calibration Services are taxable under Service Tax, provided certain conditions are met.
🔍 Let’s break this down:
🔹 1. Nature of Calibration Service:
Calibration refers to testing/measuring instruments to ensure they meet standards.
This falls under Technical Testing and Analysis Services, as per Section 65(105)(zzh) of the Finance Act, 1994 (prior to GST).
🔹 2. Taxability:
If the calibration is not in relation to exempted goods or not part of manufacturing, service tax is applicable.
Labour charges, if billed separately for calibration, are still considered taxable because service tax is on the activity, not on cost structure.
🔹 3. Exemption Scenarios (Not Applicable):
If calibration is done in-house — no service tax.
If services are covered under a job work related to manufacture of excisable goods and fall under mega exemption Notification 25/2012-ST, there may be exemption, but calibration usually does not qualify unless it's integrally part of manufacturing.
🔹 4. Reverse Charge Not Applicable:
Calibration services are not under reverse charge, so the service provider charges service tax, not the manufacturing company.
✅ What to Check:
✔ Whether you received a separate invoice for calibration service?
✔ Is the service provider registered under Service Tax?
✔ Is the service part of a manufacturing process or an independent activity?
If it's a separate calibration job (like ISO-certified labs), yes, service tax is applicable, and the provider must charge and pay it.
🧾 Reference:
Section 65(105)(zzh), Finance Act, 1994
CBEC Education Guide (2012)
Notification No. 25/2012-ST (Mega Exemption)
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Query on effect of registration of property
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Visiting card purchase
- GST on reimbursement of expenses
- Additional trade name
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Wrong CMPo8 file
- Whether output tax is taken credit by purchaser
- Number of years as per AS amortisation of Goodwill
- Equity Share Sale and Purchase
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
